According to Zillow’s US and 50 Largest Metro Areas report for November 2017, housing costs in San Jose are the most expensive for any Metro area in the country.
Five of the most expensive metro areas in the country are in California, and 3 of the top 10 (San Jose, San Francisco, and Sacramento are in our own Bay Area.
Here is my Bay Area Pick of the Week: A well known gas station/mini-mart franchise Arco AM/Pm Market in Antioch
The Triple Net investment concept allows you to buy commercial property that has a long term lease from a tenant which obligates the tenant to pay all expenses on the property, so that you as the owner/landlord have little or no responsibility beyond receiving a rent check each month.
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CALIFORNIA
California has experienced 5 years of rising home prices, and that trend is expected to continue for another 3 years. If prices rise the 4.2% projected for next year, the average price of a home in California will reach $561,020 and surpass the record set in 2007 or $560,270.
However, even at this level, prices will remain below pre-recession levels when adjusted for inflation.
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According to Core Logic, home prices increased 6.7% nationally in July of 2017 when compared to July of 2016. This compares to a rate of 7.7% for Santa Cruz County where the average price is now $815,000.
Core Logic sees a market of continuing strong demand for homes coupled with a lack of willing sellers that continues to result in an inadequate supply to meet demand which is pushing prices up. One other factor in the equation is continued low interest rates, which have returned to levels last seen in the Fall of 2016.
Rates for 30 year conforming ($424,000 or less) loans averaged 4.11%.
Investors can benefit from NNN lease properties in a variety of ways. In NNN leases tenants take on the responsibility of major expenses such as HVAC and roof repairs keeping the operation cost lower for the landlord. Typically, NNN leases have lower rent per square foot rates which increases the tenant pool when a landlord is ready to lease the property. For specific tenants, landlords will frequently modify leases allowing for greater flexibility and higher tenant retention.
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